What is capital gain tax in India?

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Nimish

0 October 26, 2021

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If you are a taxpayer then you should know what is capital gain tax in India. Since tax is such a vast subject, it becomes a little confusing at times to determine the applicability of it in varied scenarios. Let us first understand what is capital gain. Capital gain is profit that comes from a capital asset. The tax applicable on this income or capital gain is termed as capital gain tax. There are two types of capital gain tax in India - LTCG and STCG.

What is Long Term Capital Gain Tax in India?

An asset which is held for more than 24 months is known as Long term capital asset. If the asset is a movable property such as jewellery, debt-oriented mutual funds etc, then the holding period is 36 months. The long term capital gain tax in India is charged at 20% rate on the profit.

Check out how to calculate long term capital gain tax in India What is short term capital gain tax in India?

An asset which is held for 36 months is known as short term capital asset. However, capital assets like land, building and house property if held for less than 24 months are included in this category. The STCG tax in India is charged at 15% when securities transaction tax is applicable. If the securities transaction tax is not applicable then short-term capital gain is added to the income tax return and the taxpayer is taxed according to his income tax slab.